Former Crystal Palace and Oldham Athletic boss Dowie had been in charge at City for just under a year, but was unable to move the club forward in the way he had planned.
A short statement on the club's official website confirmed: "Iain Dowie, (assistant manager) Tim Flowers and (chief scout) Bob Dowie have been relieved of their duties with immediate effect.
"Frankie Bunn and John Harbin will take charge of first-team affairs for Tuesday' game against Cardiff City at the Ricoh Arena.
"Coventry City Football Club will not be making any further statement at this time."